Bangladeshi tanneries cannot compete in the international market due to the lack of certification from the Leather Working Group (LWG), an organization working to reduce the environmental impact of the leather industry worldwide. On the other hand, Chinese buyers, the only hope, are not showing much interest in buying leather this time, citing the new US tariff policy. The buyers who are coming are not willing to pay a fair price. As a result, tannery owners are forced to sell leather at a loss.
Bangladeshi tanners “held hostage” by Chinese buyer syndicates
Figure 1: Bangladeshi tanners “held hostage” by Chinese buyer syndicates
Such information was recently found in a media report. Tannery owners complain that they have been held hostage by a syndicate of Chinese buyers.
“Our peak season starts after Eid-ul-Azha, when Chinese buyers usually place large orders for leather. However, this year is different. Chinese buyers are not placing orders, citing difficulties in selling leather due to US tariff policies. As a result, our sales have decreased,” Shakhawat Ullah, senior vice president of the Bangladesh Tanners Association, told the media.
He further said, “The condition of this industrial city is already pathetic. There is no Central Effluent Treatment Plant (CETP) and solid waste management system here. Although several factories have the capacity, they are unable to directly enter the US and European markets due to a lack of LWG certificates. The government is also not taking any initiative. As long as environmental pollution persists, we will be unable to compete in the international market. As a result, we have to remain dependent on China.”
Imam Hossain, Managing Director of ABS Tannery, told the media, “There are no buyers, to whom will we sell the leather? The old stock is still sitting unused. Even so, we purchased more leather this Eid season. But honestly, the blame lies with us; we operate through a syndicate. I can’t sell the leather at a higher price. The government should create a market; we will buy the leather at a higher price.”
Expressing his anger, he further said, “The leather that I used to sell for $2.50 to $3 in Hazaribagh, now I have to sell it for 40-50 cents. Even then, there are no buyers.”
The report also highlights how syndicates of Chinese buyers are driving down product prices. Imam Hossain said, “When buyers come to see EFGS grade leather after preparing it for sale, they say various things and leave out a large portion. As a result, there is no chance of grading that leather as good quality. Then they (buyers) inform their known buyers and agencies about the matter. After that, no one can sell that leather at a good price anymore, and the price automatically decreases. At some point, the leather has to be graded as TR and sold at a loss.”
Bangladeshi tanners “held hostage” by Chinese buyer syndicates
Figure 2: CETP in the leather industrial area is running on an experimental basis
The report highlights why it has become impossible to obtain LWG certification in Bangladesh. Basically, there is no roadmap for when the CETP and solid waste management system will be established in the overall situation. Along with this, the short-sighted decisions of the previous government, errors in the planning of the Bangladesh Small and Cottage Industries Corporation (BSCIC), corruption and negligence are also blamed.
Meanwhile, the Anti-Corruption Commission (ACC) has found evidence of looting of more than Tk 4.5 billion from the CETP construction project.
When the tannery industry was shifted from Hazaribagh to Savar, BSCIC promised that the new industrial zone would be eco-friendly. They claimed that this would attract European buyers and lead to achieving LWG (Leather Working Group) certification, which would ultimately increase the price of leather. However, nine years later, the leather industry in Savar is still polluting the environment and the Dhaleswari River.
